Connecticut 2025 Regular Session Status: Enacted

HB 7166 — AN ACT CONCERNING THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT'S RECOMMENDATIONS FOR REVISIONS TO CERTAIN COMMERCE AND TAX CREDIT STATUTES.

Last action — SIGNED BY GOVERNOR

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  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed House
  4. ✓
    Passed Senate
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced March 06, 2025. Enacted.

Signed by Governor Ned Lamont (Democratic) on July 01, 2025.

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Likely to advance 68% · moderate confidence

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High

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  • Enacted

    Current position in the legislative process.

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    Passed 2 recorded votes so far.

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Bill Text

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1110 added · 684 removed

1110 line(s) added, 684 removed.

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House of Representatives General Assembly File No.
Substitute House Bill No.
885 January Session, 2025 Substitute House Bill No.
7166 Public Act No.
7166 House of Representatives, May 12, 2025 The Committee on Finance, Revenue and Bonding reported through REP.
25-165 AN ACT CONCERNING THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT'S RECOMMENDATIONS FOR REVISIONS TO CERTAIN COMMERCE AND TAX CREDIT STATUTES.
HORN of the 64th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.
AN ACT CONCERNING THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT'S RECOMMENDATIONS FOR REVISIONS TO CERTAIN TAX CREDIT STATUTES.
Subsection (b) of section 12-217n of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2025):
Section 12-217n of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to income and taxable years commencing on or after January 1, 2025):
(b) For purposes of this section:
(a) There shall be allowed as a credit against the tax imposed by this chapter the amount determined under subsection (c) of this section in respect of the research and development expenses paid or incurred during any income year, subject to the limitations of this section.
(1) "Research and development expenses" means research or experimental expenditures deductible under Section 174 of the Internal Revenue Code of 1986, as in effect on May 28, 1993, determined without regard to Section 280C(c) thereof or any elections made by a taxpayer to amortize such expenses on its federal income tax return that were otherwise deductible, and basic research payments as defined under Section 41 of said Internal Revenue Code to the extent not deducted under said Section 174, provided:
(b) [For purposes of] As used in this section:
(A) Such expenditures and payments sHB7166 / File No.
(1) "Research and development expenses" means research or experimental expenditures deductible under Section 174 of the Internal Revenue Code of 1986, as in effect on May 28, 1993, determined without regard to Section 280C(c) thereof or any elections made by a taxpayer to amortize such expenses on its federal income tax return that were otherwise deductible, and basic research payments as defined under Substitute House Bill No.
885 1 sHB7166 File No.
7166 Section 41 of said Internal Revenue Code to the extent not deducted under said Section 174, provided:
885 are paid or incurred for such research and experimentation and basic research conducted in this state;
(A) Such expenditures and payments are paid or incurred for such research and experimentation and basic research conducted in this state;
(4) "Qualified small business" means a company that (A) has gross income for the previous income year that does not exceed one hundred million dollars, and (B) has not, in the determination of the commissioner, met the gross income test through transactions with a related person, as defined in section 12-217w;
(4) "Qualified small business" means a [company] taxpayer that (A) has gross income for the previous income year that does not exceed one hundred million dollars, and (B) has not, in the determination of the commissioner, met the gross income test through transactions with a related person, as defined in section 12-217w;
and (5) "Taxpayer" means (A) taxpayer as defined in section 12-213, and (B) a limited liability company that (i) has more than three thousand employees in this state, and (ii) is engaged in manufacturing, with expertise in mechatronics, alignment and sensor technology and optical fabrication.
and (5)"Taxpayer"means(A)ataxpayer,asdefinedin section12-213, and (B) a single member limited liability company that (i) has more than three thousand employees in this state, and (ii) is engaged in manufacturing, with expertise in mechatronics, alignment and sensor technology and optical fabrication.
For purposes of this section, if a single member limited liability company is disregarded as an entity separate from its owner for federal income tax purposes, the calculation of the total number of employees in this state of the limited liability company shall include both the employees of the limited liability company and the employees of such limited liability company's owner.
(c) (1) The amount allowed as a credit in any income year shall be the Public Act No.
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7166 tentative credit calculated under subdivision (2) of this subsection, modified as provided in subsection (e) or (f) of this section, if applicable, except that in the case of a qualified small business the tentative credit allowed for research and development expenses shall be equal to six per cent of such expenses or in the case of any business employing over two thousand five hundred people in the state of Connecticut with annual revenues in excess of three billion dollars and headquartered in an enterprise zone the tentative credit allowed for research and development expenses shall be equal to the greater of (A) the tentative credit calculated under subdivision (2), modified as provided in subsection (e) or (f) of this section, if applicable, or (B) three and one- half per cent of such expense.
(2) Where the research and development expenses paid or incurred in the income year equal:
(A) Fifty million dollars or less, the tentative credit allowed shall be an amount equal to one per cent of such expenses;
(B) more than fifty million dollars but not more than one hundred million dollars, the tentative credit allowed shall be equal to five hundred thousand dollars plus two per cent of the excess of such expenses over fifty million dollars;
(C) more than one hundred million dollars but not more than two hundred million dollars, the tentative credit allowed shall be equal to one million five hundred thousand dollars plus four per cent of the excess of such expenses over one hundred million dollars;
and (D) more than two hundred million dollars, the tentative credit allowed shall be equal to five million five hundred thousand dollars plus six per cent of the excess of such expenses over two hundred million dollars.
(d) (1) The credit provided for by this section shall be allowed for any income year commencing on or after January 1, 1993, provided any credits allowed for income years commencing on or after January 1, 1993, and prior to January 1, 1995, may not be taken until income years commencing on or after January 1, 1995, and, for the purposes of Public Act No.
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7166 subdivision (2) of this subsection, shall be treated as if the credit for each such income year first became allowable in the first income year commencing on or after January 1, 1995.
(2) No more than one-third of the amount of the credit allowable for any income year may be included in the calculation of the amount of the credit that may be taken in that income year.
(3) The total amount of the credit under subdivision (1) of this subsection that may be taken for any income year may not exceed the greater of (A) fifty per cent of the taxpayer's tax liability or in the case of a combined return, fifty per cent of the combined tax liability, for such income year, determined without regard to any credits allowed under this section, and (B) the lesser of (i) two hundred per cent of the credit otherwise allowed under subsection (c) of this section for such income year, and (ii) ninety per cent of the taxpayer's tax liability or in the case of a combined return, ninety per cent of the combined liability for such income year, determined without regard to any credits allowed under this section.
(4) (A) Credits that are allowed under this section for income years commencing prior to January 1, 2021, that exceed the amount permitted to be taken in an income year pursuant to the provisions of subdivision (1), (2) or (3) of this subsection shall be carried forward to each of the successive income yearsuntilsuch credits,or applicableportionthereof, are fully taken.
(B) Credits that are allowed under this section for income years commencing on or after January 1, 2021, that exceed the amount permitted to be taken in an income year pursuant to the provisions of subdivision (1), (2) or (3) of this subsection shall be carried forward to each of the successive income years until such credits, or applicable portion thereof, are fully taken.
No credit or portion thereof allowed under this section for income years commencing on or after January 1, Public Act No.
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7166 2021, shall be carried forward for a period of more than fifteen years.
(C) No credit allowed under this section shall be taken in any income yearuntilthefullamountofallallowablecreditscarriedforwardtosuch year from any prior income year, commencing with the earliest such prior year, that otherwise may be taken under subdivision (2) of this subsection in that income year, have been fully taken.
(D) If the taxpayer that pays or incurs research and development expenses is a single member limited liability company that is disregarded as an entity separate from its owner, the credit may be claimed by such limited liability company's owner, provided such owner is subject to the tax imposed under this chapter.
(e) In addition to the wage base test set forth in subsection (f) of this section, any aerospace company or in the case of a combined return, any combined group including an aerospace company, shall be subject to this subsection for any income year commencing on or after January 1, 1993, and prior to January 1, 1996.
For purposes of this subsection, an aerospace company is any taxpayer, whether or not included in a combined return, engaged principally in the aerospace industry whose research and development expenses during each of the income years beginning on or after January 1, 1990, 1991 and 1992, respectively, exceeded two hundred milliondollars.
No aerospace company,or in the case of a combined return, a combined group including an aerospace company, shall be allowed any credit under this section for any income year to which this subsection applies in which the aggregate transfers by an aerospace company, if any, of historical economic base functions outside of this state, other than to a location outside the United States, since January 1, 1993, through the end of such income year, have materially reduced the historical economic base functions in this state.
For purposes of this subsection, the historical economic base functions shall be those economic base functions conducted by an aerospace company, which need not be all economic base functions of the Public Act No.
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7166 aerospace company, in this state on January 1, 1993, whose continuance in this state, as determined by the commissioner in his discretion, will further the policies set forth in section 32-221.
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Such historical economic base functions shall be set forth in a binding memorandum of understanding between the commissioner and an aerospace company that may be entered into at any time prior to the expiration of the first income year to which this subsection applies, with sufficient specificity to allow the commissioner and the aerospace company to determine in all income years subject to this subsection whether there has been such a reduction in said historical economic base functions.
As a prerequisite to the allowance of any credit otherwise allowable under this section for any income year to which this subsection applies, each aerospace company shall obtain a certificate of eligibility issued by the commissioner to the aerospace company for such income year.
The aerospace company shall not later than sixty days after the close of each income year to whichthissubsectionapplies certify to thecommissioner thattherehasbeennosuchaggregatematerialreductioninthehistorical economic base functions in this state for the income year just completed that otherwise has not been offset as provided below.
Within sixty days thereafter, the commissioner shall review the certification and, if the commissioner determines that there has been no such net aggregate material reduction in the historical economic base functions in this state, the commissioner shall issue a certificate of eligibility for said income year.
The following shall not constitute a material reduction in the historical economic base functions in this state:
(1) A reduction of not more than two per cent of the historical economic base functions;
(2) transfer of an historical economic base function to a person in this state;
(3) transfer of a historical economic base function outside of the United States;
or (4) reductions in historical economic base functions attributable to reductions in volume, productivity improvements or the discontinuance of operations due to obsolescence or the like.
Any transfers that may otherwise be counted in determining if a material reduction occurred may be offset to the extent economic base functions Public Act No.
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7166 listed in, or comparable to those listed in, the memorandum of understanding are increased in this state, transferred into this state, or established in this state.
Any such increase, transfer or establishment made during an income year, or subsequent to such income year but prior to the filing of the return for such income year, shall be effective for such income year and all income years thereafter.
The commissioner may issue or reissue a certificate of eligibility for the applicable income year following any such offset.
The commissioner shall, upon request, provide a copy of the certificate of eligibility and memorandum of understanding to the Commissioner of Revenue Services.
(f) The tentative credit allowable to the taxpayer, or in the case of a combined return, the combined group, that pays or incurs research and development expenses in excess of two hundred million dollars for the income year shall be reduced for any income year in which the workforcereductions, ifany, exceed thepercentagesset forthbelow.For purposes of this subsection, workforce reductions shall be reductions of the historical Connecticut wage base of the taxpayer, or in the case of a combined return, the combined group, as a result of the transfer outside of this state, other than to a location outside the United States, of work done by employees of the taxpayer, or in the case of a combined return, the combined group.
Such reduction in the tentative credit shall be as follows:
(1) If the historical Connecticut wage base for the income year is so reduced by not more than two per cent, the tentative credit allowable for the income year shall not be reduced;
(2) if the historical Connecticut wage base for the income year is so reduced by more than two per cent but not more than three per cent, the tentative credit allowable for the income year shall be reduced by ten per cent;
(3) if the historical Connecticut wage base for the income year is so reduced by more than three per cent but not more than four per cent, the tentative credit allowable fortheincome yearshallbereducedby twenty per cent;
(4) if the historical Connecticut wage base for the income year is so reduced by more than four per cent but not more than five per cent, the Public Act No.
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7166 tentative credit allowable for the income year shall be reduced by forty per cent;
(5) if the historical Connecticut wage base for the income year is so reduced by more than five per cent but not more than six per cent, the tentative credit allowable for the income year shall be reduced by seventy per cent;
and (6) if the historical Connecticut wage base for the income year is so reduced by more than six per cent, no credit for the income year shall be allowed.
The Connecticut wage base for any income year shall be the total wages assigned to Connecticut for such income year under section 12-218 excluding wages paid to the ten most highly-compensated executives of the taxpayer, or in the case of a combined return, the combined group, and any compensation that does not subject the recipient thereof to federal income tax thereon in said income year.
The historical Connecticut wage base shall be the Connecticut wage base for the third full income year immediately preceding the current income year;
provided the historical Connecticut wage base for the first three income years commencing on or after January 1, 1993, shall be the Connecticut wage base for May 1993, converted to an annual basis.
The following shall not constitute a workforce reduction for any income year:
(A) A reduction of wages attributable to the transfer of work done by a taxpayer, or in the case of a combined return, by the combined group, in this state to a party in this state;
(B) a reduction of wages attributable to the transfer of work done by a taxpayer, or in the case of a combined return, by the combined group,outsidetheUnitedStates;or(C)areductioninwagesattributable to reductions in volume, productivity improvements or the discontinuance of operations due to obsolescence or the like.
Solely for purposes of determining whether the allowable credit is to be reduced under this subsection for any income year, the Connecticut wages attributable to any new jobs or jobs moved into this state by the taxpayer, or in the case of a combined return, the combined group, during such income year or subsequent to such income year but prior to the filing of the return for such income year shall be an offset to any workforce reduction of a taxpayer, or in the case of a combined return, Public Act No.
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7166 the combined group, for said income year.
A new job shall be a job that did not exist in the business of a taxpayer, or in the case of a combined return, a member of the combined group, in this state at the end of the income year just completed.
Notwithstanding subsection (g) of this section, a taxpayer may elect for any income year to separately compute its allowable tentative credit under this subsection for any one or more business units that had gross revenues for such income year in excess of one hundred million dollars.
Any taxpayer subject to this subsection shall not later than sixty days after the close of each income year certify to the commissioner whether or not there has been any workforce reduction for the income year just completed, the amount thereof, and any offsets thereto as provided above.
Not later than sixty days thereafter, the commissioner shall review the certification and, if the commissionerdeterminesthattherehasbeennomorethanasixpercent workforce reduction, net of any such offsets, the commissioner shall issue a certificate of eligibility stating the amount of net workforce reduction so determined for said income year, if any.
The commissioner shall not issue a certificate of eligibility for any income year in which the commissioner determines that there has been more than a six per cent networkforcereduction.Thecommissionershall,uponrequest,provide a copy of the certificate of eligibility to the Commissioner of Revenue Services.
(g) Where one or more taxpayers properly included in a combined return pays or incurs research and development expenses, all allowances and limitations under this section shall be made on an aggregate basis for all taxpayers included in such combined return, provided, the credit attributable to a qualified small business may be taken only against the combined tax liability attributable to such qualified small business.
The amount of the combined tax for all corporations properly included in a combined corporation business tax return that is attributable to a qualified small business shall be in the same ratio to such combined tax that the net income apportioned to this Public Act No.
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7166 state of the qualified small business bears to the net income, in the aggregate of all corporations included in such combined return.
Solely for the purposes of computing such ratio, any net loss apportioned to this state by a corporation included in such combined return shall be disregarded.
(h) Any taxpayer, or in the case of a combined return, any combined group of taxpayers, that claims a credit under section 12-217j, as amended by this act, for any income year shall reduce the amount of research and development expenses that otherwise may be taken into account in computing the allowable credit under subsection (c) of this section for such income year by the amount of excess research and experimental expenditures, as computed under said section 12-217j, for which the credit thereunder is given.
(i) The commissioner may adopt regulations, in accordance with the provisions of chapter 54, to carry out the purposes of this section.
Section 12-217j of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to income and taxable years commencing on or after January 1, 2025):
(a) (1) There shall be allowed as a credit against the tax imposed on any [corporation] taxpayer under this chapter, with respect to income years of such [corporation] taxpayer commencing on or after January 1, 1994, an amount equal to twenty per cent of the amount spent by such [corporation] taxpayer directly on research and experimental expenditures, as defined in Section 174 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, which are conducted in this state and which exceeds the amount spent by such [corporation] taxpayer during the preceding income year of such [corporation] taxpayer for such expenditures.
Public Act No.
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7166 (2) As used in this section, "taxpayer" means (A) a taxpayer, as defined in section 12-213, and (B) a single member limited liability company that (i) has more than three thousand employees in this state, and (ii) is engaged in manufacturing, with expertise in mechatronics, alignment and sensor technology and optical fabrication.
For purposes of this section, if a single member limited liability company is disregarded as an entity separate from its owner for federal income tax purposes, the calculation of the total number of employees in this state of the limited liability company shall include both the employees of the limited liability company and the employees of such limited liability company's owner.
(b) (1) With respect to any income year commencing on or after January 1, 2000, a credit or any portion of a credit that is allowed under this section but that is not used by a taxpayer because the amount of the credit exceeds the tax due and owing by the taxpayer shall be carried forward to each of the successive income years until such credit, or applicable portion of the credit, is fully taken.
In no case shall a credit, or any portion of a credit, that is not used by a taxpayer be carried forward for a period of more than fifteen years.
(2) (A) With respect to any income year commencing on or after January 1, 1997, and prior to January 1, 2000, a credit or any portion of a credit that is allowed under this section but that is not used by a biotechnology company because the amount of the credit exceeds the tax due and owing by the taxpayer shall be carried forward to each of the successive income years until such credit, or applicable portion of the credit, is fully taken.
In no case shall a credit, or any portion of a credit, that is not used by a biotechnology company be carried forward for a period of more than fifteen years.
(B) For purposes of this subsection, "biotechnology company" means a company engaged in the business of applying technologies, such as recombinant DNA techniques, biochemistry, molecular and cellular Public Act No.
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7166 biology, genetics and genetic engineering, biological cell fusion techniques, and new bioprocesses, using living organisms, or parts of organisms, to produce or modify products, to improve plants or animals, to develop microorganisms for specific uses, to identify targets for small molecule pharmaceutical development, or to transform biological systems into useful processes and products.
(3) If the taxpayer that pays or incurs research and experimental expenditures is a single member limited liability company that is disregarded as an entity separate from its owner, the credit may be claimed by such limited liability company's owner, provided such owner is subject to the tax imposed under this chapter.
Sec.
3.
(3) (A) "Qualified production" means entertainment content created sHB7166 / File No.
(3) (A) "Qualified production" means entertainment content created in whole or in part within the state, including motion pictures, except as otherwise provided in this subparagraph;
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885 in whole or in part within the state, including motion pictures, except as otherwise provided in this subparagraph;
and any trailer, pilot, video teaser or demo created primarily to stimulate the sale, marketing, promotionor exploitationoffuture investment ineither a product or a qualified production via any means and media in any digital media format, film or videotape, provided such program meets alltheunderlying criteriaofaqualifiedproduction.For state fiscalyears ending on or after June 30, 2014, "qualified production" shall not include a motion picture that has not been designated as a state-certified qualified production prior to July 1, 2013, and no tax credit voucher for such motion picture may be issued for such motion picture, except, for state fiscal years ending on or after June 30, 2015, "qualified production" shall include a motion picture for which twenty-five per cent or more of theprincipalphotography shooting daysare inthisstate atafacility that receives not less than twenty-five million dollars in private investment and opens for business on or after July 1, 2013, and a tax credit voucher may be issued for such motion picture.
and any trailer, pilot, video teaser or demo created primarily to stimulate the sale, marketing, promotionor exploitationoffuture investment ineither a product or a qualified production via any means and media in any Public Act No.
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7166 digital media format, film or videotape, provided such program meets alltheunderlying criteriaofaqualifiedproduction.For state fiscalyears ending on or after June 30, 2014, "qualified production" shall not include a motion picture that has not been designated as a state-certified qualified production prior to July 1, 2013, and no tax credit voucher for such motion picture may be issued for such motion picture, except, for state fiscal years ending on or after June 30, 2015, "qualified production" shall include a motion picture for which twenty-five per cent or more of theprincipalphotography shooting daysare inthisstate atafacility that receives not less than twenty-five million dollars in private investment and opens for business on or after July 1, 2013, and a tax credit voucher may be issued for such motion picture.
(4) "Eligible production company" means a corporation, partnership, limited liability company, or other business entity engaged in the sHB7166 / File No.
(4) "Eligible production company" means a corporation, partnership, limited liability company, or other business entity engaged in the business of producing qualified productions on a one-time or ongoing basis, and qualified by the Secretary of the State to engage in business in the state.
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885 business of producing qualified productions on a one-time or ongoing basis, and qualified by the Secretary of the State to engage in business in the state.
(A) Expenditures incurred in the state in the form of either compensation or purchases including production work, production equipment not eligible for the infrastructure tax credit provided in section 12-217kk, as amended by this act, production software, postproduction work, postproduction equipment, postproduction software, set design, set construction, props, lighting, wardrobe, makeup, makeup accessories, special effects, visual effects, audio effects, film processing, music, sound mixing, editing, location fees, soundstages and any and all other costs or services directly incurred in connection with a state-certified qualified production;
Public Act No.
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7166 (A) Expenditures incurred in the state in the form of either compensation or purchases including production work, production equipment not eligible for the infrastructure tax credit provided in section 12-217kk, as amended by this act, production software, postproduction work, postproduction equipment, postproduction software, set design, set construction, props, lighting, wardrobe, makeup, makeup accessories, special effects, visual effects, audio effects, film processing, music, sound mixing, editing, location fees, soundstages and any and all other costs or services directly incurred in connection with a state-certified qualified production;
(i) On and after January 1, 2008, compensation in excess of fifteen million dollars paid to any individual or entity representing an individual, for services provided in the production of a qualified production and on or after January 1, 2010, compensation subject to Connecticut personal income tax in excess of twenty million dollars paid in the aggregate to sHB7166 / File No.
(i) On and after January 1, 2008, compensation in excess of fifteen million dollars paid to any individual or entity representing an individual, for services provided in the production of a qualified production and on or after January 1, 2010, compensation subject to Connecticut personal income tax in excess of twenty million dollars paid in the aggregate to any individuals or entities representing individuals, for star talent provided in the production of a qualified production;
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885 any individuals or entities representing individuals, for star talent provided in the production of a qualified production;
(iii) deferred, leveraged or profit participation costs relating to any and all personnel associated with any and all aspects of the production, including, but not limited to, producer fees, director fees, talent fees and writer fees;
(iii) deferred, Public Act No.
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7166 leveraged or profit participation costs relating to any and all personnel associated with any and all aspects of the production, including, but not limited to, producer fees, director fees, talent fees and writer fees;
sHB7166 / File No.
(9) "Post-certification remedy" means the recapture, disallowance, Public Act No.
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885 (9) "Post-certification remedy" means the recapture, disallowance, recovery, reduction, repayment, forfeiture, decertification or any other remedy that would have the effect of reducing or otherwise limiting the use of a tax credit provided by this section.
7166 recovery, reduction, repayment, forfeiture, decertification or any other remedy that would have the effect of reducing or otherwise limiting the use of a tax credit provided by this section.
(C) A relocated television production may be a state-certified qualified production for not more than ten successive income years, after which period the eligible production company shall be ineligible to resubmit an application for certification.
(C) A relocated television production may be a state-certified qualified production for not more than ten successive income years, after which period the eligible production company shall be ineligible Public Act No.
sHB7166 / File No.
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7166 to resubmit an application for certification.
885 (b) (1) The Department of Economic and Community Development shall administer a system of tax credit vouchers within the resources, requirements and purposes of this section for eligible production companies producing a state-certified qualified production in the state.
(b) (1) The Department of Economic and Community Development shall administer a system of tax credit vouchers within the resources, requirements and purposes of this section for eligible production companies producing a state-certified qualified production in the state.
(d) For income years commencing on or after January 1, 2010, no expenses or costs incurred outside the state and used within the state shall be eligible for a credit, and one hundred per cent of such expenses sHB7166 / File No.
Public Act No.
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885 or costs shall be counted toward such credit when incurred within the state and used within the state.
7166 (d) For income years commencing on or after January 1, 2010, no expenses or costs incurred outside the state and used within the state shall be eligible for a credit, and one hundred per cent of such expenses or costs shall be counted toward such credit when incurred within the state and used within the state.
(e) (1) On and after July 1, 2006, and for income years commencing on or after January 1, 2006, any credit allowed pursuant to this section may be sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers, provided (A) no credit, after issuance, may be sold, assigned or otherwise transferred, in whole or in part, more than three times, (B) in the case of a credit allowed for the income year commencing on or after January 1, 2011, but prior to January 1, 2012, any entitythat isnot subject to tax under chapter 207or thischapter may transfer not more than fifty per cent of such credit in any one income year, and (C) in the case of a credit allowed for an income year commencing on or after January 1, 2012, any entity that is not subject to tax under chapter 207 or this chapter may transfer not more than twenty-five per cent of such credit in any one income year.
(e) (1) On and after July 1, 2006, and for income years commencing on or after January 1, 2006, any credit allowed pursuant to this section may be sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers, provided (A) no credit, after issuance, may be sold, assigned or otherwise transferred, in whole or in part, more than three times, (B) in the case of a credit allowed for the income year commencing on or after January 1, 2011, but prior to January 1, 2012, any entitythat is not subject to tax under chapter 207or thischapter may transfer not more than fifty per cent of such credit in any one income year, and (C) in the case of a credit allowed for an income year commencing on or after January 1, 2012, any entity that is not subject to tax under chapter 207 or this chapter may transfer not more than twenty-five per cent of such credit in any one income year.
For purposes of this subdivision, "qualified production facility" means a facility (A) located in this state, (B) intended for film, television or digital media production, and (C) that has had a minimum investment of three million dollars, or less if the Commissioner of Economic and Community Development determines such facility otherwise qualifies.
For purposes of this subdivision, "qualified production facility" means a facility (A) located in this state, (B) intended for film, television Public Act No.
(4) (A) For the income year commencing on or after January 1, 2018, sHB7166 / File No.
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7166 or digital media production, and (C) that has had a minimum investment of three million dollars, or less if the Commissioner of Economic and Community Development determines such facility otherwise qualifies.
885 butpriortoJanuary1, 2019,anycreditthatis sold,assignedorotherwise transferred, in whole or in part, to one or more taxpayers pursuant to subdivision (1) of this subsection may be claimed against the tax imposedunderchapter211onlyifthereiscommonownershipofatleast fifty per cent between such taxpayer and the eligible production company that sold, assigned or otherwise transferred such credit.
(4) (A) For the income year commencing on or after January 1, 2018, butpriortoJanuary1, 2019,anycreditthatis sold,assignedorotherwise transferred, in whole or in part, to one or more taxpayers pursuant to subdivision (1) of this subsection may be claimed against the tax imposedunderchapter211onlyifthereiscommonownershipofatleast fifty per cent between such taxpayer and the eligible production company that sold, assigned or otherwise transferred such credit.
(5) (A) For income years commencing on or after January 1, 2022, but prior to January 1, 2024, and on or after January 1, 2026, any credit that is claimed against the tax imposed under chapter 219 shall be subject to the following limits:
(5) (A) For income years commencing on or after January 1, 2022, but prior to January 1, 2024, and on or after January 1, 2026, any credit that is claimed against the tax imposed under chapter 219 shall be subject to Public Act No.
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7166 the following limits:
and sHB7166 / File No.
and (ii) The eligible production company or taxpayer claiming the credit against thetax imposedunder chapter 219may onlyclaimseventy-eight per cent of the amount of such credit entered by the department on the production tax credit voucher.
885 9 sHB7166 File No.
885 (ii) The eligible production company or taxpayer claiming the credit against thetax imposedunder chapter 219may onlyclaimseventy-eight per cent of the amount of such credit entered by the department on the production tax credit voucher.
(f) (1) On and after July 1, 2006, and for income years commencing on or after January 1, 2006, but prior to January 1, 2015, all or part of any such credit allowed under this section may be claimed against the tax imposed under chapter 207 or this chapter for the income year in which the production expenses or costs were incurred, or in the three immediately succeeding income years.
(f) (1) On and after July 1, 2006, and for income years commencing on or after January 1, 2006, but prior to January 1, 2015, all or part of any such credit allowed under this section may be claimed against the tax imposed under chapter 207 or this chapter for the income year in which the production expenses or costs were incurred, or in the three Public Act No.
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7166 immediately succeeding income years.
(3) For production tax credit vouchers issued on or after July 1, 2018, but prior to January 1,2022,allor part ofanysuch credit may beclaimed against the tax imposed under chapter 207 or 211 or this chapter, for the sHB7166 / File No.
(3) For production tax credit vouchers issued on or after July 1, 2018, but prior to January 1,2022,allor part ofanysuch credit may beclaimed against the tax imposed under chapter 207 or 211 or this chapter, for the income year in which the production expenses or costs were incurred, or in the five immediately succeeding income years.
885 10 sHB7166 File No.
885 income year in which the production expenses or costs were incurred, or in the five immediately succeeding income years.
No production expenses or costs may be listed more than once for purposes of the tax credit voucher pursuant to this section, or pursuant to section 12-217kk, as amended by this act, or 12-217ll, and if a production expense or cost has been included in a claim for a credit, such production expense or cost may not be included in any subsequent claim for a credit.
No production expenses or costs may be listed more than once for purposes of the tax credit voucher pursuant to this section [, or pursuant to] or section 12-217kk, as amended by this act, [or 12-217ll,] and if a production expense or cost has been included in a claim for a credit, such production expense or cost may not be included in any subsequent Public Act No.
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7166 claim for a credit.
Such sHB7166 / File No.
Such independent certification shall be provided by an audit professional chosen from a list compiled by the department.
885 11 sHB7166 File No.
885 independent certification shall be provided by an audit professional chosen from a list compiled by the department.
If such transferee sells, assigns or otherwise transfers a credit under this section to a subsequent transferee, such transferee and such subsequent transferee shall jointly submit written notification of such transfer to the department not later than thirty days after such transfer.
If such transferee sells, assigns or otherwise transfers a credit under this section to a subsequent transferee, such transferee and such subsequent transferee shall jointly submit written notification of such transfer to the Public Act No.
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7166 department not later than thirty days after such transfer.
(j) Any eligible production company that submits information to the department that it knows to be fraudulent or false shall, in addition to any other penalties provided by law, be liable for a penalty equal to the amount of such company's credit entered on the production tax credit sHB7166 / File No.
(j) Any eligible production company that submits information to the department that it knows to be fraudulent or false shall, in addition to any other penalties provided by law, be liable for a penalty equal to the amount of such company's credit entered on the production tax credit voucher issued under this section.
885 12 sHB7166 File No.
885 voucher issued under this section.
3.
4.
(a) As used in this section:
Public Act No.
25-165 23 of 35 Substitute House Bill No.
7166 (a) As used in this section:
(4) "State-certifiedproject" means an infrastructure project undertaken in this state by an entity that (A) is in compliance with regulations adopted pursuant to subsection (e) of this section, (B) is authorized to conduct business in this state, (C) is not in default on a loan made by the state or a loan guaranteed by the state, nor has ever declared bankruptcy under which an obligation of the entity to pay or repay public funds was discharged as a part of such bankruptcy, and (D) has been approved by the department as qualifying for an sHB7166 / File No.
(4) "State-certified project" means an infrastructure project undertaken in this state by an entity that (A) is in compliance with regulations adopted pursuant to subsection (e) of this section, (B) is authorized to conduct business in this state, (C) is not in default on a loan made by the state or a loan guaranteed by the state, nor has ever declared bankruptcy under which an obligation of the entity to pay or repay public funds was discharged as a part of such bankruptcy, and (D) has been approved by the department as qualifying for an infrastructure tax credit under this section.
885 13 sHB7166 File No.
885 infrastructure tax credit under this section.
(ii) for state-certified projects costing one hundred fifty thousand dollars or more, but less than one million dollars, each taxpayermaybeallowedataxcreditoffifteenpercentoftheinvestment made by such taxpayer;
(ii) for state-certified projects costing one hundred fifty thousand dollars or more, but less than one million dollars, each Public Act No.
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7166 taxpayermaybeallowedataxcreditoffifteenpercentoftheinvestment made by such taxpayer;
sHB7166 / File No.
(3) Any credit allowed pursuant to this section may be sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers, and such taxpayers may sell, assign or otherwise transfer, in whole or in part, such credit.
885 14 sHB7166 File No.
885 (3) Any credit allowed pursuant to this section may be sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers, and such taxpayers may sell, assign or otherwise transfer, in whole or in part, such credit.
(c) (1) An entity undertaking an infrastructure project shall apply to the department for an eligibility certificate not later than ninety days after thefirst expenses or costsare incurred,andshall providewithsuch application such information as the department may require to determine such infrastructure project's eligibility as a state-certified project.
(c) (1) An entity undertaking an infrastructure project shall apply to the department for an eligibility certificate not later than ninety days Public Act No.
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7166 after thefirst expenses or costsare incurred,andshall providewithsuch application such information as the department may require to determine such infrastructure project's eligibility as a state-certified project.
(3) Prior to the issuance of a state-certified project tax credit voucher to a taxpayer based upon the tax credit certification letter issued pursuant to subdivision (2) of this subdivision, the entity undertaking such infrastructure project shall provide the department with a description of the progress on such project and an estimated completion sHB7166 / File No.
(3) Prior to the issuance of a state-certified project tax credit voucher to a taxpayer based upon the tax credit certification letter issued pursuant to subdivision (2) of this subdivision, the entity undertaking such infrastructure project shall provide the department with a description of the progress on such project and an estimated completion date.
885 15 sHB7166 File No.
885 date.
(d) If a taxpayer sells, assigns or otherwise transfers a credit under this section to another taxpayer, the transferor and transferee shall jointly submit writtennotificationofsuchtransfer to thedepartment not later than thirty days after such transfer.
(d) If a taxpayer sells, assigns or otherwise transfers a credit under Public Act No.
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7166 this section to another taxpayer, the transferor and transferee shall jointly submit writtennotificationofsuchtransfer to thedepartment not later than thirty days after such transfer.
(f) The department, in consultation with the commissioner, [shall] sHB7166 / File No.
(f) The department, in consultation with the commissioner, [shall] may adopt regulations, in accordance with the provisions of chapter 54, as may be necessary for the administration of this section.
885 16 sHB7166 File No.
Sec.
885 may adopt regulations, in accordance with the provisions of chapter 54, as may be necessary for the administration of this section.
5.
This act shall take effect as follows and shall amend the following sections:
(NEW) (EffectiveJuly 1, 2025) The Department of Economic and Community Development may establish and administer a program for the sale of Connecticut brand merchandise and advertising space for Connecticutbusinesses.Allproceedsderivedfromtheoperationofsuch program shall be deposited in the Tourism Fund.
Section 1 July 1, 2025 12-217n(b) Sec.
Public Act No.
2 July 1, 2025, and 12-217jj applicable to applications open or filed on or after July 1, 2025 Sec.
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3 July 1, 2025 12-217kk Statement of Legislative Commissioners:
7166 Sec.
In Section 1(5) a definition was changed for clarity.
6.
CE Joint Favorable Subst.
Section 32-7v of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2025):
C/R FIN FIN Joint Favorable Subst.-LCO sHB7166 / File No.
(a)(1)TheCommissionerofEconomicandCommunityDevelopment shall, within available resources, establish a workforce [development] incentive program to provide grants to [nonprofit organizations] employers that employ individuals with intellectual disability, as defined in section 1-1g.
885 17 sHB7166 File No.
Such grants shall be awarded for infrastructure expenditures, [start-up] programmatic costs or expansion costs.
885 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.
(2) Any [nonprofit organization that] employer that (A) employs, at the time of application, a workforce of which not less than [ten] five per cent consists of individuals with intellectual disability, as defined in section 1-1g, who have been employed for a period of not less than six months in the previous calendar year and are paid not less than the minimum fair wage established pursuant to section 31-58, and (B) provides such individuals with competitive integrated employment, as that term is defined in 34 CFR 361.5(c)(9), as amended from time to time, may apply for a grant under the program.
In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.
(3) Grants awarded pursuant to this section shall not exceed:
Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.
(A) Twenty-five thousand dollars per [nonprofit organization] employer employing a workforce of which between [ten] five and [thirty] twenty per cent, inclusive, consists of such individuals with intellectual disability;
OFA Fiscal Note State Impact:
and (B) Seventy-five thousand dollars per [nonprofit organization] employer employing a workforce of which more than [thirty] twenty- one per cent, but not more than thirty per cent, consists of such individuals with intellectual disability.
Agency Affected Fund-Effect FY 26 $ FY 27 $ Department of Revenue Services GF - Potential 0.3 million - 0.3 million - Revenue Loss 0.8 million 0.8 million Note:
(b) The Department of Economic and Community Development may enter into an agreement, pursuant to chapter 55a, with a person, firm, corporation or other entity to operate the program established pursuant Public Act No.
GF=General Fund Municipal Impact:
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None Explanation The bill allows a limited liability company (LLC) that meets specified employment and industry parameters to earn Research & Development (R&D)tax credits.
7166 to this section.
To theextent thecreditscouldbeclaimed,thisresults in a General Fund revenue loss of between $0.3 million and $0.8 million beginning in FY 26.
(c) The commissioner shall prescribe the form and manner of the application and such application procedure shall include a competitive award process.
1 The bill also makes various clarifying, conforming, and administrative changes to the state's film and digital media production and film infrastructure development tax credits that do not result in any fiscal impact.
Sec.
The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to credit-qualifying R&D activity.
7.
1It is uncertain whether R&D credits earned under the bill would be able to be claimed as the bill does not allow qualifying LLCs to claim the credits against any taxes for which they are liable or transfer them to an eligible taxpayer.
Section 32-5a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2025):
sHB7166 / File No.
The Commissioner of Economic and Community Development and the board of directors of Connecticut Innovations, Incorporated shall require, as a condition of any financial assistance provided on and after June 23, 1993, under any program administered by the Department of Economic and Community Development or such corporation to any business organization, except for a business organization that receives any such financial assistance in an amount not more than fifty thousand dollars and is an eligible small business, as defined in section 31-3pp, or under any assistance program that is funded entirely by the federal government, in which case the commissioner may require, that such business organization:
885 18 sHB7166 File No.
(1) Shall not relocate outside of the state for ten years after receiving such assistance or during the term of a loan or loan guarantee, whichever is longer, unless the full amount of the assistance is repaid to the state and a penalty equal to five per cent of the total assistance received is paid to the state, except that this subdivision shall not be applicable to financial assistance by the corporation in the form of an equity investment or other financial assistance, including a convertible or seed loan, with predominantly equity characteristics, and (2) shall, if the business organization relocates within the state during suchperiod,offeremploymentatthenewlocationtoitsemployeesfrom the original location if such employment is available.
885 OLR Bill Analysis sHB 7166 AN ACT CONCERNING THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT'S RECOMMENDATIONS FOR REVISIONS TO CERTAIN TAX CREDIT STATUTES.
For the purposes of subdivision (1) of this section, the value of a guarantee shall be equal to the amount of the state's liability under the guarantee.
SUMMARY This billallowsa limitedliability company (LLC)that meets specified employment and industry parameters to earn R&D credits.
As used in this section, "financial assistance" does not include any tax credit program administered by the Department of Economic and Community Public Act No.
To qualify for the tax credit, the LLC must (1) have over 3,000 employees in Connecticut and (2) be engaged in manufacturing, with expertise in mechatronics, alignment and sensor technology, and optical fabrication.
25-165 29 of 35 Substitute House Bill No.
By law, R&D tax credits apply only against the corporation business tax (for which an LLC is not liable).
7166 Development or Connecticut Innovations, Incorporated, and "relocate" means the physical transfer of a substantial portion, as determined by the Commissioner of Economic and Community Development, of the operationsofabusinessoranydivisionofabusiness thatindependently receives any financial assistance from the state from the location such business or division occupied at the time it accepted the financial assistance to another location.
The bill does not correspondingly allow a qualifying LLC to claim the credit against any tax to which it is liable or transfer the credit to another taxpayer.
Notwithstanding the provisions of this section, the Commissioner of Economic and Community Development shall adopt regulations in accordance with chapter 54 to establish the terms and conditions of repayment, including specifying the conditions under which repayment may be deferred, following a determination by the commissioner of a legitimate hardship.
The bill also makes several changes to the state’s tax credit programs for film and digital media production and film infrastructure development.
Sec.
Specifically, it:
8.
1.
Subsection (a) of section 32-228 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2025):
exempts production companies that produce an interactive website from specified eligibility criteria;
(a) The Commissioner of Economic and Community Development may,withtheapprovaloftheCommissionerofAdministrativeServices, the Secretary of the Office of Policy and Management and the State Properties Review Board, sell, exchange, lease or enter into agreements concerning any real property belonging to the state and transferred to the custody and control of the Department of Economic and Community Development.
2.
The commissioner shall require, as a condition of any sale, exchange, lease or agreement entered into pursuant to this section, that such real property be used primarily for manufacturing or economic base businesses, [or for] business support services or cultural or historical attractions or sites.
requires all eligible production companies to apply to the Department of Economic and Community Development (DECD) for a film and digital media production credit voucher within 90 days after completing an independent certification of their production costs, rather than within 90 days after incurring their last production expense;
Prior to any such sale, exchange, lease or agreement, the commissioner shall consult with each municipality in which the land, improvement or interest is located.
3.
Sec.
specifies that the administrative fee DECD charges to cover the department’s costs to analyze film tax credit applications is nonrefundable;
9.
and sHB7166 / File No.
(NEW) (Effective July 1, 2025) The state, acting through the Department of Economic and Community Development or any other state agency, governmental entity or the private sector, may, within Public Act No.
885 19 sHB7166 File No.
25-165 30 of 35 Substitute House Bill No.
885 4.
7166 available appropriations, provide financial assistance, lend staff or provide other in-kind contributions to any nonprofit in the state established, in part, to (1) carry out the purpose of providing technical assistance and business expertise to new companies located in or planning to locate in the state, or (2) promote economic growth and business expansion in the state through the collection, organization and dissemination of information, expertise and other resources for use by individuals and groups.
allows, rather than requires as under current law, DECD to adopt regulations to administer the film tax credit programs.
Sec.
EFFECTIVE DATE:
10.
July 1, 2025, and the film production tax credit provisions are applicable to applications open or filed on or after that date.
Subsection (a) of section 12-211a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
ELIGIBILITY CRITERIA FOR INTERACTIVE WEBSITES To qualify for the tax credit under existing law, eligible production companies must (1) conduct at least 50% of their principal photography days in Connecticut or (2) incur at least 50% or at least $1 million of their post-production costs in the state.
(a) (1) Notwithstanding any provision of the general statutes, and except as otherwise provided in subdivision [(5)] (6) of this subsection or in subsection (b) of this section, the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter for any calendar year shall not exceed seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to such calendar year of the taxpayer prior to the application of such credit or credits.
The bill exempts eligible production companies that produce an interactive website for public distribution or exhibition from these requirements.
(2) For the calendar year commencing January 1, 2011, "type one tax credits" means tax credits allowable under section 12-217jj, as amended by this act, 12-217kk, as amended by this act, or 12-217ll;
Under existing law and the bill, an “interactive website” is a website with production expenses or costs that (1) exceed $500,000 per income year and (2) are primarily (a) interactive games or end user applications or (b) animation, simulation, sound, graphics, story lines, or video created or repurposed for distribution over the internet.
"type two tax credits" means tax credits allowable under section 38a-88a;
It excludes websites used primarily for institutional, private, industrial, retail or wholesale marketing, or promotional purposes, or containing obscene content.
"type three tax credits" means tax credits that are not type one tax credits or type two tax credits;
BACKGROUND R&D Tax Credit The R&D credit generally applies to R&D spending that a business incurs in the state to develop or improve a product and qualifying research payments it makes to nonprofit organizations (i.e.
"thirty per cent threshold" means thirty per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credit;
nonincremental R&D spending) (CGS § 12-217n).
"fifty-five per cent threshold" means fifty-five per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits;
The potential credit amount generally ranges from 1% for spending up to $50 million to 6% for spending over $200 million, except for eligible small businesses and certain companies headquartered in an enterprise zone.
and "seventy per cent threshold" means seventy per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits.
The law also allows a separate research and experimental (R&E) tax credit that applies to R&D spending that a business incurs in Connecticut that exceeds the amount it spent during the preceding sHB7166 / File No.
Public Act No.
885 20 sHB7166 File No.
25-165 31 of 35 Substitute House Bill No.
885 income year (i.e.
7166 (3) For the calendar year commencing January 1, 2012, "type one tax credits" means the tax credit allowable under section 12-217ll;
incremental R&D spending) (CGS § 12-217j).
"type two tax credits" means tax credits allowable under section 38a-88a;
Eligible businesses receive a credit equal to 20% of their incremental R&D spending.
"type three tax credits" means tax credits that are not type one tax credits or type two tax credits;
By law, qualified small businesses that earn R&D and R&Etax credits for R&D expenditures but cannot use them because they have no corporation business tax liability may receive a cash refund for 65% of the credit amount.
"thirty per cent threshold" means thirty per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credit;
A qualified small business is a company whose gross income for the prior year is $70 million or less, including income from transactions with related entities.
"fifty-five per cent threshold" means fifty-five per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits;
The refund is capped at $1.5 million per company for each income year, and a qualified small business may carry its unused credits forward instead of applying for a cash refund.
and "seventy per cent threshold" means seventy per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits.
Film and Digital Media Production Tax Credit This tax credit is generally available to eligible production companies, including corporations, partnerships, LLCs, and other business entities, producing qualified film and digital media entertainment content in Connecticut (CGS § 12-217jj).
(4) For calendar years commencing on or after January 1, 2013, and prior to January 1, 2025, "type one tax credits" means the tax credit allowable under sections 12-217jj, as amended by this act, 12-217kk, as amended by this act, and 12-217ll;
The credit amount generally equals (1) 10% of qualified production expenditures between $100,000 and $500,000;
"type two tax credits" means tax credits allowable under section 38a-88a;
(2) 15% of qualified expenditures exceeding $500,000 but not exceeding $1 million;
"type three tax credits" means taxcreditsthatarenottypeonetaxcreditsortypetwotaxcredits;"thirty per cent threshold" means thirty per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credit;
and (3) 30% of qualified expenditure above $1 million.
"fifty- five per cent threshold" means fifty-five per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits;
The credit may be claimed against the community antenna and satellite TV companies tax, corporation business tax, insurance premiums tax, or sales and use tax.
and "seventy per cent threshold" means seventy per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits.
Film Infrastructure Tax Credit This tax credit is generally available to businesses that spend at least $3 million developing buildings, facilities, and installations needed for film and digital media production (CGS § 12-217kk).
(5) For calendar years commencing on or after January 1, 2025, "type one tax credits" means the tax credit allowable under sections 12-217jj, as amended by this act, and 12-217kk, as amended by this act;
The credit amount equals 20% of eligible investment expenditures and may be claimed against the corporation business or insurance premiums taxes.
"type two tax credits" means tax credits allowable under section 38a-88a;
Infrastructure projects must be completed before the credit can be claimed.
"type three tax credits" means tax credits that are not type one tax credits or type two tax credits;
sHB7166 / File No.
"thirty per cent threshold" means thirty per cent of the amount of tax due from a taxpayer under this chapter prior to the Public Act No.
885 21 sHB7166 File No.
25-165 32 of 35 Substitute House Bill No.
885 COMMITTEE ACTION Commerce Committee Joint Favorable Substitute Change of Reference - FIN Yea 19 Nay 1 (03/20/2025) Finance, Revenue and Bonding Committee Joint Favorable Yea 52 Nay 0 (04/24/2025) sHB7166 / File No.
7166 application of tax credit;
885 22
"fifty-five per cent threshold" means fifty-five per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits;
and "seventy per cent threshold" means seventy per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits.
[(5)] (6) For calendar years commencing on or after January 1, 2011, and subject to the provisions of subdivisions (2), (3), [and] (4) and (5) of this subsection, the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter shall not exceed:
(A) If the tax credit or credits being claimed by a taxpayer are type three tax credits only, thirty per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credit or credits.
(B) If the tax credit or credits being claimed by a taxpayer are type one tax credits and type three tax credits, but not type two tax credits, fifty-five per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credit or credits, provided (i) type three tax credits shall be claimed before type one tax credits are claimed, (ii) the type three tax credits being claimed may not exceed the thirty per cent threshold, and (iii) the sum of the type one tax credits and the type three tax credits being claimed may not exceed the fifty-five per cent threshold.
(C) If the tax credit or credits being claimed by a taxpayer are type two tax credits and type three tax credits, but not type one tax credits, seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credit or credits, provided (i) type three tax credits shall be claimed before type two tax credits are claimed, (ii) the type three tax credits being claimed may not exceed the thirty per cent Public Act No.
25-165 33 of 35 Substitute House Bill No.
7166 threshold, and (iii) the sum of the type two tax credits and the typethree tax creditsbeing claimed may not exceed the seventy per cent threshold.
(D) If the tax credit or credits being claimed by a taxpayer are type one tax credits, type two tax credits and type three tax credits, seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credits, provided (i) type three tax credits shall be claimed before type one tax credits or type two tax credits are claimed, and the type one tax credits shall be claimed before the type two tax credits are claimed, (ii) the type three tax credits being claimed may not exceed the thirty per cent threshold, (iii) the sum of the type one tax credits and the type three tax credits being claimed may not exceed the fifty-five per cent threshold, and (iv) the sum of the type one tax credits, thetype two tax creditsandthetypethree taxcreditsbeing claimed may not exceed the seventy per cent threshold.
(E) If the tax credit or credits being claimed by a taxpayer are type one tax credits and type two tax credits only, but not type three tax credits, seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credits, provided (i) the type one tax credits shall be claimed before type two tax credits are claimed, (ii) the type one tax credits being claimed may not exceed the fifty-five per cent threshold, and (iii) the sum of the type one tax credits and the type two tax creditsbeing claimed may not exceed the seventy per cent threshold.
Sec.
11.
Subdivision (10) of subsection (a) of section 32-1m of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(10) An overview of the department's activities concerning digital media, motion pictures and related production activity, and an analysis of the use of the film production tax credit established under section 12- Public Act No.
25-165 34 of 35 Substitute House Bill No.
7166 217jj, as amended by this act, and the entertainment industry infrastructuretaxcreditestablishedundersection12-217kk,asamended by this act, [and the digital animation production tax credit established under section 12-217ll,] including the amount of any tax credit issued under said sections, the total amount of production expenses or costs incurred in the state by the taxpayer who was issued such a tax credit and the information submitted in the report required under subparagraph (A) of subdivision [(1)] (2) of subsection (h) of section 12- 217jj, as amended by this act.
Sec.
12.
Subdivision (6) of section 32-1p of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(6) To prepare an explanatory guide showing the impact of relevant state and municipal tax statutes, regulations and administrative opinions on typical production activities and to implement the tax credits provided for in sections 12-217jj, as amended by this act, and 12- 217kk, as amended by this act;
[and 12-217ll;] Sec.
13.
Section 12-217ll of the general statutes is repealed.
(Effective from passage) Governor's Action:
Approved July 1, 2025 Public Act No.
25-165 35 of 35
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Action History

  1. SIGNED BY GOVERNOR

  2. TRANSMITTED BY SECRETARY OF THE STATE TO GOVERNOR

  3. TRANSMITTED TO SECRETARY OF THE STATE

  4. PUBLIC ACT 25-165

  5. IN CONCURRENCE

  6. SEN. PASSED, HO. AMEND. SCH. A

  7. SEN. ADOPTED HO. AMEND. SCH. A

  8. RULES SUSPENDED

  9. SENATE CALENDAR NUMBER 591

  10. FAV. RPT., TAB. FOR CAL., SEN.

  11. TRANSMITTED PURSUANT TO JOINT RULE 17

  12. HOUSE PASSED, HOUSE AMEND. SCH. A

  13. HOUSE ADOPTED HOUSE AMEND. SCH. A

  14. FILE NO. 885

  15. HOUSE CALENDAR NUMBER 579

  16. FAV. RPT., TABLED FOR HOUSE CALENDAR

  17. RPTD. OUT OF LCO

  18. REFERRED TO Office of Legislative Research AND Office of Fiscal Analysis 05/12/25

  19. FILED WITH LCO

  20. Joint Favorable

  21. FAV. CHG. OF REF., SEN. TO COMM. ON Finance, Revenue and Bonding

  22. FAV. CHG. OF REF. HOUSE TO COMM. ON Finance, Revenue and Bonding

  23. RPTD. OUT OF LCO

  24. FILED WITH LCO

  25. Joint Favorable Substitute Change of Reference FIN

  26. PUBLIC HEARING 0311

  27. REF. TO JOINT COMM. ON Commerce

Sponsorship breakdown

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0 sponsors · 0 co-sponsors · 187 not signed on · 22 voted No

Sponsors (0)

None.

Co-sponsors (0)

None.

Not signed on (187)

187 members have not signed on to this bill.

Show all 187 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

Senate Roll Call Vote

Passed 36 Yea · 0 Nay
Party YeaNayPresentNot Voting
Democratic 25000
Republican 11000
Total 36000
% of votes cast 100%0%0%0%
How each member voted (36)
Member Party Vote
Bob Duff Democratic Yea
Catherine A. Osten Democratic Yea
Ceci Maher Democratic Yea
Christine Cohen Democratic Yea
Derek Slap Democratic Yea
Douglas McCrory Democratic Yea
Gary A. Winfield Democratic Yea
Herron Gaston Democratic Yea
James J. Maroney Democratic Yea
Jan Hochadel Democratic Yea
Joan V. Hartley Democratic Yea
John W. Fonfara Democratic Yea
Jorge Cabrera Democratic Yea
Julie Kushner Democratic Yea
MD Rahman Democratic Yea
Mae Flexer Democratic Yea
Martha Marx Democratic Yea
Martin M. Looney Democratic Yea
Matthew L. Lesser Democratic Yea
Norman Needleman Democratic Yea
Patricia Billie Miller Democratic Yea
Paul Honig Democratic Yea
Rick Lopes Democratic Yea
Saud Anwar Democratic Yea
Sujata Gadkar-Wilcox Democratic Yea
Eric C. Berthel Republican Yea
Heather S. Somers Republican Yea
Henri Martin Republican Yea
Jason Perillo Republican Yea
Jeff Gordon Republican Yea
John A. Kissel Republican Yea
Paul Cicarella Republican Yea
Rob Sampson Republican Yea
Ryan Fazio Republican Yea
Stephen G. Harding Republican Yea
Tony Hwang Republican Yea

Official roll call →

House Roll Call Vote

Passed 125 Yea · 22 Nay · 4 Other
Party YeaNayPresentNot Voting
Democratic 94002
Republican 252202
Unaffiliated 6000
Total 1252204
% of votes cast 83%15%0%3%
How each member voted (151)
Member Party Vote
Ryan — Yea
Collins Main — Yea
Mccarthy Vahey — Yea
Morrin Bello — Yea
Sanchez, J. — Yea
Sanchez, R. — Yea
Aimee Berger-Girvalo Democratic Yea
Alphonse Paolillo Democratic Yea
Andre F. Baker Democratic Yea
Anne M. Hughes Democratic Yea
Anthony L. Nolan Democratic Yea
Antonio Felipe Democratic Yea
Aundre Bumgardner Democratic Yea
Bob Godfrey Democratic Yea
Bobby G. Gibson Democratic Yea
Brandon Chafee Democratic Yea
Christopher Poulos Democratic Yea
Christopher Rosario Democratic Yea
Corey P. Paris Democratic Yea
Daniel Gaiewski Democratic Yea
David DeFronzo Democratic Yea
Derell Wilson Democratic Yea
Dominique Johnson Democratic Yea
Eleni Kavros DeGraw Democratic Yea
Farley Santos Democratic Yea
Frank Smith Democratic Yea
Fred Gee Democratic Yea
Gary A. Turco Democratic Yea
Geoff Luxenberg Democratic Yea
Geraldo C. Reyes Democratic Yea
Gregory Haddad Democratic Yea
Hector Arzeno Democratic Yea
Henry J. Genga Democratic Yea
Hilda E. Santiago Democratic Yea
Hubert D. Delany Democratic Yea
Jaime S. Foster Democratic Yea
James Sanchez Democratic Yea
Jane M. Garibay Democratic Yea
Jason Doucette Democratic Yea
Jason Rojas Democratic Yea
Jennifer Leeper Democratic Yea
Jill Barry Democratic Yea
Jillian Gilchrest Democratic Yea
John Santanella Democratic Yea
John-Michael Parker Democratic Yea
Jonathan Fazzino Democratic Yea
Jonathan Jacobson Democratic Yea
Jonathan Steinberg Democratic Yea
Joseph P. Gresko Democratic Yea
Josh Elliott Democratic Yea
Joshua M. Hall Democratic Yea
Juan R. Candelaria Democratic Yea
Julio A. Concepcion Democratic Yea
Kadeem Roberts Democratic Yea
Kai J. Belton Democratic Yea
Kaitlyn Shake Democratic Yea
Kara Rochelle Democratic Yea
Kate Farrar Democratic Yea
Kenneth Gucker Democratic Yea
Kerry S. Wood Democratic Yea
Kevin Brown Democratic Yea
Larry B. Butler Democratic Yea
Laurie Sweet Democratic Yea
Liz Linehan Democratic Yea
Lucy Dathan Democratic Yea
Marcus Brown Democratic Not Voting
Maria P. Horn Democratic Yea
Mary Fortier Democratic Yea
Mary M. Mushinsky Democratic Yea
Mary Welander Democratic Yea
Maryam Khan Democratic Yea
Matt Blumenthal Democratic Yea
Matthew Ritter Democratic Yea
Melissa Osborne Democratic Yea
Michael "MJ" Shannon Democratic Yea
Michael D. Quinn Democratic Yea
Michael DiGiovancarlo Democratic Yea
Mike Demicco Democratic Yea
Minnie Gonzalez Democratic Yea
Moira Rader Democratic Yea
Nicholas Menapace Democratic Yea
Nick Gauthier Democratic Yea
Patricia A. Dillon Democratic Yea
Patrick Biggins Democratic Yea
Patrick S. Boyd Democratic Yea
Raghib Allie-Brennan Democratic Yea
Rebecca Martinez Democratic Yea
Renee LaMark Muir Democratic Yea
Robin E. Comey Democratic Yea
Roland J. Lemar Democratic Yea
Ronald A. Napoli Democratic Yea
Sarah Keitt Democratic Yea
Savet Constantine Democratic Yea
Stephen R. Meskers Democratic Yea
Steven J. Stafstrom Democratic Yea
Steven Winter Democratic Yea
Susan M. Johnson Democratic Yea
Tammy R. Exum Democratic Yea
Toni E. Walker Democratic Not Voting
Travis Simms Democratic Yea
Trenee McGee Democratic Yea
William Heffernan Democratic Yea
Amy Romano Republican Nay
Anne Dauphinais Republican Nay
Arnold Jensen Republican Nay
Ben McGorty Republican Yea
Bill Buckbee Republican Nay
Brian Lanoue Republican Nay
Cara Christine Pavalock-D'Amato Republican Yea
Carol Hall Republican Yea
Chris Aniskovich Republican Yea
Chris Stewart Republican Not Voting
Christie M. Carpino Republican Yea
Craig C. Fishbein Republican Nay
Dave W. Yaccarino Republican Yea
David Rutigliano Republican Nay
Devin R. Carney Republican Yea
Donna Veach Republican Not Voting
Doug Dubitsky Republican Nay
Gale L. Mastrofrancesco Republican Nay
Greg S. Howard Republican Yea
Irene M. Haines Republican Yea
Jason Buchsbaum Republican Yea
Jay M. Case Republican Yea
Joe Canino Republican Nay
Joe Hoxha Republican Nay
Joe Polletta Republican Nay
John E. Piscopo Republican Nay
Joseph H. Zullo Republican Nay
Karen Reddington-Hughes Republican Nay
Kathy Kennedy Republican Yea
Kurt Vail Republican Nay
Lezlye Zupkus Republican Nay
Mark DeCaprio Republican Nay
Mark W. Anderson Republican Nay
Martin Foncello Republican Yea
Mitch Bolinsky Republican Yea
Nicole Klarides-Ditria Republican Yea
Patrick E. Callahan Republican Nay
Seth Bronko Republican Yea
Steve Weir Republican Nay
Tami Zawistowski Republican Nay
Tammy Nuccio Republican Yea
Tim Ackert Republican Yea
Tina Courpas Republican Yea
Tom Delnicki Republican Yea
Tom O'Dea Republican Yea
Tony J. Scott Republican Yea
Tracy Marra Republican Yea
Vincent J. Candelora Republican Yea
William Pizzuto Republican Yea

Official roll call →

Subjects

taxation finance labor technology
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